Well, not all G20 finance ministers came to Sydney this weekend. No-shows were from South Africa, Brazil, Mexico, Italy and the World Bank president.
The Guardian reported that the number of ministers failing to show up to Sydney was an indication of the G20's fall from grace. This was a bit harsh. Domestic pressures are likely to result in some casualties. And while the drop-out rate may have started to cause some concerns, there were enough big names to give the Sydney meeting gravitas.
The ministers certainly 'saw'. There was TV coverage of Australian Treasurer Joe Hockey pointing out the sights of Sydney Harbour and the compulsory 'G20 family photo' was taken in front of Sydney Harbour Bridge and the Opera House.
But did they conquer?
It all depends what you expect from these international meetings. Most people think 'not much'. A financial market reaction is unlikely; it is only in the midst of a crisis that such international meetings move markets.
The communiqué was pleasingly short, and the priorities for G20 finance ministers in 2014 are clearly identified. But none of them are easy. Moreover, this was one of many preparatory meetings for the Brisbane Summit. The hard work still lies ahead if Australia's chairing of the G20 is to be considered a success.
There was expected to be a clash between emerging markets and Janet Yellen, Chair of the US Federal Reserve, over the impact of the tapering of quantitative easing. Perhaps perversely, this 'tension' gave the meeting a welcome focus. [fold]
The year started with optimism that the world economy had turned the corner. Policy complacency is a danger and the concerns of the emerging markets were a reminder of the volatility and vulnerabilities confronting the global economy. There appears to have been a good discussion on this issue during the meetings, and as the Treasurer said, agreement that there should be good communication and no surprises. The communiqué said that the setting of monetary policy will include an 'exchange of information and being mindful of impacts on the global economy'. This is progress.
The Treasurer's big win was endorsement of a target to lift global growth by 2% over five years. The target came from research by the IMF suggesting this could be achieved if G20 countries all adopted additional policy measures.
But the G20 has been here before.
The Toronto G20 summit declaration refers to research by the IMF showing that if G20 members adopted more ambitious policies, global output could be increased by $4 trillion, 52 million jobs could be created and 90 million people could be lifted from poverty. In June 2009, G20 leaders committed to work together to achieve these outcomes. Yet global growth continued to disappoint; the ambitious reforms were not adopted.
Will the new growth target lead to better outcomes? Hopefully it will focus minds on the need to lift growth. More importantly, it is to be hoped that ministers recognised that the G20 needs a comprehensive and coordinated growth strategy, because the current approach is not working. So it is welcome that each G20 country will present its growth plan at the Brisbane summit.
But having a growth target and a plan to get there is only meaningful if the plan is implemented. And the reforms identified by the IMF and OECD to lift growth are politically difficult for all. For example, the top reform priorities identified by the OECD for Australia are: boosting business-research collaboration; improving the efficiency of the tax system by lowering corporate taxes and relying more on the GST; improving the regulation of infrastructure by expanding user charges and congestion charges; improving childcare support; and reducing the stringency of the scrutiny of foreign investment. Tough stuff.
Having agreed on a target to lift growth, the real challenge now is for each G20 country to engage with its citizens over the necessary reforms that will have to be implemented to achieve the target. Australia has to continue to work on ensuring that G20 members take the growth target and strategy seriously.
G20 ministers continued to endorse efforts to strengthen financial sector regulation and combat tax evasion and avoidance. On financial regulatory reforms, there was the noble aim to ensure that the reforms promote resilience, certainty and promote growth, but no detail on achieving these objectives.
Regret was expressed over the failure to complete IMF quota and governance reforms and the US was urged to ratify the reforms by this April. Will this influence the US Congress? Unlikely. But it is a reminder that it is one thing to reach agreement at an international meeting, it is another thing to win the domestic political battle to have it implemented.
